Five accounting myths busted

When it comes to accounting myths and misconceptions, I’ve heard them all. Whether it’s thinking you only need an accountant for your tax return or believing that DIY accounting saves you money (spoiler alert … it doesn’t!) I thought it was about time to debunk some of the most popular myths people believe when it comes to accounting.

Myth 1: DIY accounting saves money

This is one of the most common (and pervasive) myths in business accounting. Many business owners out there genuinely believe that doing their own accounts and financials is saving their business money. Truth bomb alert … it isn’t! Whilst DIY bookkeeping might seem like a smart move for cash-strapped startups, saving a few quid now could cost you big tomorrow. It’s easy to let small errors accumulate into financial avalanches and, before you know it, those pounds have slipped through the cracks when tax season hits with its hidden deductions and ever-changing regulations. By trying to save yourself money through not hiring an accountant now, you could miss out on saving money elsewhere in your business. Take it from me, missed opportunities aren’t just line items, they’re growth pathways left unexplored because you were too busy reconciling transactions from six months ago. Using the right expert will not only prevent costly mistakes from occurring, it will identify strategies that maximise your profits and efficiency. Fact.

Myth 2: Small businesses don’t need accountants

Many small business owners shy away from seeking advice from an accountant as they think hiring a professional is something only big businesses do. Believe me, no business is too small to benefit from the expert guidance an accountant can offer. Working with an accountant will always add value to your business, no matter how small (or large) your company is. Whatever the size of your business, using an accountant will help you to develop a sound financial plan and ensure you keep accurate financial records in place ready for HMRC. To find out why this is so vital, have a read of my previous blog post, ‘Six reasons why maintaining regular bookkeeping is important.’

Myth 3: I don’t need an accountant if I use accounting software

There is currently no legal requirement to use accounting software, as the Government’s Making Tax Digital (MTD) scheme is yet to be rolled out. And, whilst accounting software can be a useful tool for managing your finances, it is not and never will be an alternative to using an accountant. There are many different accounting software options available to help small businesses but, ultimately, software is just a tool there to help support you, it’s not able to think for itself, offer advice or spot errors in the way that an accountant can.

Myth 4: Business accounting isn’t important

Accounting is an integral part of running any business in the UK today. Your business can’t function without it. The importance of effective financial management in your company really can’t be overstated. Using an accountant will provide you with reliable information that enables you to make sound financial decisions and evaluate performance. Your accountant will also provide you with general business advice too, helping you see the current state of your business and identify any potential pitfalls or problem areas. There is always so much the numbers can tell you about the best way to grow your business and drive performance and your accountant is perfectly placed to advise you on this.

Myth 5: You only need an accountant to do your tax return

Many small business owners still see the role of the accountant as only being concerned with completing their tax return on time, but there is SO much more to good accountancy than this! Working with an accountant can help you in all areas of your business. From advising you on compliance with tax rules and regulations, to offering guidance on things like financial planning and investment strategies. There really is no end to the wealth of knowledge your accountant will bring to the table. If you want to find out more about the role an accountant can play in your business, have a read of my previous blog post, ‘10 reasons to use an accountant.’

Don’t shortchange the future of your business by overlooking the value of expert advice. Get in touch with me today and I’ll help you to make your money work for and not against you!